Ever since the first car rolled out from its hallowed portals way back in 1984, one company has until now dominated the Indian automotive market like no other. A fact clearly reflected in the near monopolistic 80 per cent marketshare garnered over the years by Maruti Udyog (MUL), largely due to the popularity of its 800 cc offering. However, introduction of competition and the consequent launch of new models, has resulted in a scathing battle almost 15 years later, leading to an erosion in the leader’s marketshares.

All of which led most doubting thomases to question MUL’s dominance. Earlier this year, it appeared that “competition” a hitherto unknown element for MUL, has finally caught up with India’s largest car-maker. For instance, Hyundai’s Santro, which was launched in October 1998 sold 12,684 vehicles during April to June 1999. Similarly, the Indica Telco in December 1998 rolled out 7,617 cars in the same period, while Daewoo with its small car variant Matiz also did pretty well.

Importantly, all these pretenders to the throne appeared to be raking in the moolah, at MUL’s expense. A fact reflected in the company losing its vice-like grip on marketshares which dipped during the period between April to September 1999.

The Rs 8,118 crore company, which produced 3,33, 199 vehicles last year, has now embarked on a new drive. MUL is set to launch more models, chase technology transfers (a bone of contention in the past), cut flab and woo buyers with a fresh zeal to deal with the ever intensifying competition in the car market.

A sign of the changing times at MUL, is that over the next year the company is set to launch three new models to its existing seven-model fleet. A strategy which MUL has not considered worthy enough of the Indian automotive market, since it had launched the Esteem way back in 1994. On the anvil are the Wagon-R, Baleno and a small car. These launches will help broaden MUL’s reach in the Indian car market. Furthermore, the fresh appointment of Jagdish Khattar as the new MD at the helm of affairs at MUL, has also brought down the curtain on the political wrangles over the succession issue.

Importantly for MUL, Khattar is now busy actively scripting the Indian automotive major’s path ahead. And going by the action-plan drawn up, the management at MUL appears to have their thinking caps on once again. Emphasising which, is the creation of new JVs with dealers and vendors and a reinforcement of MUL’s presence in the Rs 3 lakh price category with new models.

The proposal to pick up an equity stake in the JVs with dealers and vendors although not an innovation, is definitely a step in the right direction. Especially, since it will ensure improved productivity and quality, not to mention the cost-effective supply from the OEM manufacturers. This, in turn, will boost indigenisation levels which will help keep costs down and will also be a critical price determinant. In fact, MUL is said to be targeting an indigenisation level of 85-90 per cent for the Baleno and Wagon R within a year. This same level incidentally, was achieved for the Maruti 800 after twelve long years.

The other proposal to reinforce MUL’s presence in the Rs 3 lakh priced passenger car segment, is akin to confession from the automotive major that its stranglehold in that segment is slipping. What the introduction of models within the Rs 2.5 lakh to Rs 4 lakh price range will do is bolster MUL’s presence within that price band, which thus far has been a major breadwinner for the company. Apart from merely launching new models, MUL is also planning to push its cars utilising the customer care pitch, institutional sales and examining ways to increase market reach. The company is also said to be eying the taxi market in urban centres for its Omni. A sign of the changing times at MUL is the utilisation of the Internet to hawk cars, both new and old.

Furthermore, to the company’s credit is the fact that it appears to have weathered the initial storm of competition. And nowhere is this stressed more poignantly than in the decision by MUL to hike production by 19 per cent. This has been justified with MUL’s offtakes improving especially in the passenger vehicle segment. In fact, MUL recently breached its highest ever monthly sales (posted only in July 1999) figure of 35,978 units in August 1999.

Importantly, this record sales growth is not an abberation. It is a mere consolidation of the improving trend which is reflected in the fact, that passenger car sales (inclusive of the Omni) have recorded an impressive 20 per cent jump in the five month period from April - August 1999 to 15,7419 units. Interestingly, MUL’s success story in the past has hinged on the right mix of technology and low price, which has helped demolish competition from the likes of HM and PAL in the 80’s.